December 26, 2016

THERE WILL BE BREEZE:

Oil Producers Turn to Wind Power (ZEKE TURNER and  SARAH KENT, Dec. 26, 2016, WSJ)

The Netherlands wants to build the world's largest offshore wind project, and an unlikely company is helping: Royal Dutch Shell PLC.

The oil-and-gas giant is facing shareholder pressure to develop its renewable business. Add in falling construction costs for such projects, and Shell has decided to join a handful of other oil companies aiming to leverage their experience drilling under punishing conditions at sea.

Norway's Statoil ASA is already building its third offshore wind farm, in the Baltic Sea, and is developing the world's first floating wind farm off the east coast of Scotland. Denmark's state-owned Dong Energy AS--once a fossil-fuel champion--is now the biggest player in the offshore wind market.

A Shell-led consortium won a bid this month to build and operate a portion of the Netherlands' giant Borssele wind project in the North Sea. Once complete, the Shell-built section will generate enough power for roughly a million homes at a price of €54.50 ($56.95) per megawatt hour--a customer rate approaching that of cheaper power sources like coal or gas.

Offshore wind's competitiveness is highly subject to local power prices and government measures, including tax credits, subsidies and rate guarantees. Nonetheless, in European markets, the wind industry had thought near parity was years away.

"Right now the offshore wind project is competitive with any power source," said Dorine Bosman, Shell's manager developing its wind business.

Posted by at December 26, 2016 1:34 PM

  

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